Australia 'lags far behind' on climate policies

Adam Morton

AUSTRALIA lags far behind China and Europe in forcing industry to pay for its greenhouse gas emissions, according to research that will bolster the case for a carbon price.

A comparison of international climate policies found Australia is doing less than most of its major trading parties - including the US and Japan - to encourage a shift to a cleaner energy supply. Commissioned by the Climate Institute, the study challenges claims from the federal opposition and some business groups that Australia will damage the economy if it introduces a carbon price via a tax or emissions trading scheme.

Australia's climate policies, such as the national renewable energy target, were found to be equivalent to forcing the power industry to pay $US1.70 ($A1.71) per tonne of carbon dioxide.

By contrast, China has an underlying carbon price on its power sector of $US14.20 - eight times higher. China's policies include the forced shutdown of its worst-performing coal-fired power stations, and the world's largest renewable energy program - $US35 billion invested last year, compared with $US18 billion in the US. It is considering a carbon trading scheme.

Britain ($US29.30 a tonne), the US ($US5.10) and Japan ($US3.10) were each found to be ahead of Australia in encouraging a shift to cleaner power.

Climate Institute deputy chief executive Erwin Jackson said the world-first research showed companies in Asia and Europe were making a strategic decision to move ahead to reap the benefits of creating new jobs and industries in clean energy.

Advertisement

The report by British consultant Vivid Economics backs studies that have found a direct carbon price through a trading scheme or tax is the cheapest way to reduce emissions, and warns that Australia risks losing competitiveness if it is late in embracing clean technology.

Economist and government adviser Ross Garnaut recently said convincing Australians how much other countries - particularly China - were doing to tackle climate change was one of the most important challenges facing the government.

''I am frankly shocked at how persistent the ignorance in Australia is of that,'' Professor Garnaut said. ''It is as if a lead veil had been inserted around the brains of most Australians and made them impervious to information that is not secret, about what is going on in other countries.''